Northern Electric calls in receivers

Saturday 1 November 2003 08:01 BST

UNCERTAINTY hangs over 500 jobs after retailer Northern Electric went into administration today.

Administrators KPMG have been appointed to Northern's holding company, Shop Electric Group, and its two subsidiaries, Northern Retail, which trades as Northern Electric, and warranty support company B2C Support Services.

Northern Retail runs 25 UK electrical retail outlets.

The group, which is based in Gateshead, employs about 500 staff and has an annual turnover of £80 million.

All Northern Electric's UK stores will stay closed over the weekend to allow the receivers to carry out a stock take. The majority of staff have been sent home.

Richard Fleming and Julian Whale, of KPMG Corporate Recovery, were appointed joint administrators at the request of Shop Electric's directors.

Mr Fleming said: 'Northern Electric has suffered from competitive pressures and squeezed margins as the pre-Christmas seasonal upturn has failed to emerge.

'We hope to sell as many of the stores as going concerns and we will decide early next week whether to open some of the retail stores.'

Currently, the Northern Ireland business Shop Electric Limited, which owns 35 shops, is not in administration.

The Northern Electric shops business was formerly the retail arm of north eastern electricity distributor Northern Electric Plc, which sold it to an independent company owned by the retail business's directors in June last year.

Later, KPMG said the Northern Ireland business Shop Electric Ltd, which owns 35 electrical shops in the province, had also gone into administration.

Unison said the staff had been treated 'disgracefully' and pledged to do all it could to protect their employment rights. The first indication workers had that something was wrong came yesterday when they were told they could only sell goods that were actually in stores.

They were sent home at 11am today and now fear for their future.

'This has come as a real blow, especially so close to Christmas,' said a union spokeswoman. 'Workers' futures are now hanging in the balance.'